Benefits of an e-Business Performance Measurement Systems

To participate fully in the new world of e-business, organisations have to make significant financial investments. How then, should they evaluate e-business investment proposals and monitor the resulting performance of their on-line business operations? To what extent are traditional performance measurement systems fit for a world where clicks not bricks determine business success? This CIMA report describes research investigating how organisations have been adapting their performance measurement systems for e-business. The research aimed to identify the features and benefits of an effective e-business performance measurement system by studying twelve organisations that have had some success in developing performance measurement systems suitable for the on-line environment.

* Based on four years of case study research inlcuding interviews with 12 managers
* offers a distinctive view of e-business in measuring the performance of a business
* Recommendations are made based on the findings from cross case analysis

To participate fully in the new world of e-business, organisations have to make significant financial investments. How then, should they evaluate e-business investment proposals and monitor the resulting performance of their on-line business operations? To what extent are traditional performance measurement systems fit for a world where clicks not bricks determine business success? This CIMA report describes research investigating how organisations have been adapting their performance measurement systems for e-business. The research aimed to identify the features and benefits of an effective e-business performance measurement system by studying twelve organisations that have had some success in developing performance measurement systems suitable for the on-line environment.

The research addresses questions such as:
• How do organisations set about adapting their performance measurement systems for the online environment?
• What aspects of e-business performance do they measure?
• Do they use the Balanced Scorecard as the basis for their e-business performance measurement systems?
• Do they link their performance metrics to their e-business strategy?
• Do they adapt existing measures to monitor e-business performance, or do they add new metrics to those already in use?
• Do the benefits available from the re-design of performance measurement systems for e-business outweigh the costs involved?

This CIMA research report will be of interest to those concerned with how organisational performance measurement systems should be adapted for e-business, including managers, consultants and researchers.

Dr David Barnes - Senior Lecturer in Operations and Strategic Management, Royal Holloway, University of London.
Dr Matthew Hinton - Senior Lecturer in Information and Knowledge Management, Open University Business School.